CoreSite Realty Corporation has announced that it is under binding agreement to expand its Reston campus with the planned purchase of the Sunrise Technology Park (STP), a 21.75-acre light-industrial / flex office park 0.3 miles from CoreSite’s existing VA1 and VA2 buildings.
The STP site currently hosts four buildings totaling 315,000 sq ft. Based upon its expectations regarding entitlements for the campus, CoreSite estimates that it could build over 660,000 sq ft of new data center capacity across multiple phases on the new parcel. CoreSite anticipates closing on the acquisition of STP in the fourth quarter of 2016. CoreSite expects to invest $60 million plus transaction costs to acquire STP, followed by an additional $90 million to complete Phase 1 of the master-planned development. CoreSite anticipates that Phase 1 will be comprised of a) redeveloping an existing 48,000 sq-ft industrial building to data center use, b) building a ground-up 92,000 sq-ft data center shell, and c) building a 92,000 sq-ft structure to house centralized infrastructure intended to support needs across the planned full buildout of the campus. CoreSite expects to begin construction of Phase 1 during the third quarter of 2017, and substantially complete that Phase in the second quarter of 2018. CoreSite anticipates continuing to invest in and scale the campus by constructing additional phases to meet customer demand and, at full build out of the new site, the company estimates that it may invest $400 - $500 million across multiple phases.
Currently, CoreSite's Reston campus includes two facilities totaling over 390,000 sq ft of turn-key data center capacity. Construction of all 660,000 sq ft of new capacity envisioned by CoreSite at the STP expansion would increase CoreSite’s capacity at its Reston campus to over 1 million square feet, or 2.7x its current size, extending CoreSite’s position as a leading MTDC provider in Northern Virginia, the world’s largest data center market. In investing in the planned expansion, CoreSite intends to leverage off of the strong position it has established at its Reston campus with over 175 customers, including 35 networks and over 50 cloud and IT service providers. CoreSite believes its Reston campus represents a leading cloud hub in Northern Virginia, including hosting AWS Direct Connect in addition to other leading cloud service providers. In addition to its cloud capabilities, CoreSite’s Reston colocation campus provides direct, low-latency network access to and from CoreSite’s data center in Washington, D.C. and key network access points along the Eastern Seaboard, enabling networks, cloud providers, and enterprises to scale, improve performance, and reduce costs.
"CoreSite's expansion in the Reston market is an important step in the execution of our strategy to scale our business supporting performance-sensitive customer requirements across our network-dense, cloud-enabled data center platform," said Tom Ray, president and chief executive officer, CoreSite. "This planned expansion to our Reston campus is designed to meaningfully scale our colocation offering in the important Northern Virginia market, leveraging off of the installed network-and-cloud capabilities already deployed at the campus. We believe that our Reston campus presents a nexus of robust, protected, low-latency network rings serving the market, while providing diversity from Ashburn. Additionally, we believe that the planned acquisition of the STP site will provide opportunities for CoreSite to continue its successful history of providing build-to-suit and wholesale data center solutions for customers with larger requirements. With the planned acquisition, we believe that CoreSite will be well-positioned for sustained growth in the important Northern Virginia market."
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